Question
8. A bond is selling for $1019. The coupon rate is 7.8%. It has 18-years till maturity, with semi-annual compounding. What is the yield-to-maturity (YTM)?
8. A bond is selling for $1019. The coupon rate is 7.8%. It has 18-years till maturity, with semi-annual compounding. What is the yield-to-maturity (YTM)?
a) What are the capital-gains yield and the current yield?
b) Calculate the realized compound yield (RCY) with a re-investment rate of 9%. What problem does the RCY correct and why is this important? If the investor believes interest rates are going to increase, is this a good bond choice?
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Small Fund Management
Authors: K. K.
1st Edition
979-8866391837
